Minimum Wage by State: Your 2026 Employer Guide

Navigating minimum wage compliance can feel overwhelming when you're managing employees across multiple states. With 19 states raising their minimum wage on January 1, 2026, and more than 8.3 million workers seeing pay increases, staying current on the minimum wage per state is critical for payroll accuracy and regulatory compliance.

Understanding the Federal Minimum Wage in 2026

The federal minimum wage in the USA remains at $7.25 per hour in 2026, unchanged since July 24, 2009. That marks the longest stretch in the law's history without an update. While the federal rate sets the baseline, individual states can establish higher minimum wages to reflect the local cost of living.

For employees working in states without their own minimum wage laws (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee), the federal rate applies by default. Twenty states will keep their minimum wages at the federal level in 2026.

Minimum Wage Increases Taking Effect in 2026

Starting January 1, 2026, workers in 19 states will see their hourly pay rates climb. According to the U.S. Department of Labor, employers must comply with whichever rate is higher when federal, state, and local requirements differ.

States with January 1, 2026, Increases

Several states are implementing significant adjustments to all states' minimum wage requirements:

• Hawaii leads with the largest increase, jumping $2.00 from $14.00 to $16.00
• Michigan rises substantially from $12.48 to $13.73
• Missouri and Nebraska both reach $15.00 for the first time
• New York increases to $16.50 statewide, with NYC, Long Island, and Westchester reaching $17.00
• California rises to $16.90
• Washington climbs to $17.13, the nation's highest state minimum wage

Additional states implementing increases include Arizona ($15.15), Colorado ($15.16), Connecticut ($16.94), Maine ($15.10), Minnesota ($11.41), Montana ($10.85), New Jersey ($15.92), Ohio ($11.00), Rhode Island ($16.00), South Dakota ($11.85), Vermont ($14.42), and Virginia ($12.77).

Mid-Year Increases

Not all changes happen on January 1:

• Florida increases to $15.00 on September 30, 2026
• Alaska raises its rate on July 1, 2026
• Oregon implements changes on July 1, with rates varying by region
• Washington, D.C., adjusts annually on July 1 based on inflation

All States Minimum Wage: Highest and Lowest

Washington, D.C., leads all jurisdictions at $17.95 per hour. Among states, Washington's $17.13 and Connecticut's $16.94 represent the highest rates. California ($16.90), New York ($16.50), and Hawaii ($16.00) round out the top five.

At the local level, Tukwila, Washington mandates $21.65 per hour, the highest locally mandated rate in the country. Seattle exceeds $21.00, while West Hollywood reaches over $20.00.

Twenty states maintain the federal minimum of $7.25, including Georgia, Texas, Pennsylvania, and Wisconsin.

What Employers Need to Know About Compliance

Payroll System Updates

Update your payroll systems before the effective date of any wage increase. Failure to adjust rates on time can result in underpayment penalties and potential legal action.

Geographic Considerations for Remote Workers

When an employee works remotely from a different state than your business location, the minimum wage per state where the employee performs work generally applies. For employers managing distributed teams, tracking these requirements is essential—especially for enterprise organizations with employees nationwide.

Local Wage Requirements

Cities often set higher minimum wages than their states. While Colorado's state minimum is $15.16, Denver employers must pay $19.29. Always apply the highest applicable rate.

Tipped Employee Considerations

Federal law permits $2.13 per hour for tipped employees if tips bring total earnings to at least $7.25. However, California and Washington don't allow tip credits, requiring tipped employees to receive the full state minimum before tips.

Planning Your 2026 Compensation Strategy

Minimum wage increases affect more than hourly workers. In California, Colorado, Maine, New York, and Washington, overtime exemption salary thresholds adjust annually with minimum wage changes.

For small and mid-sized businesses, offering flexible benefits like ICHRA can help attract talent without proportionally increasing fixed costs. Startups can use this approach to provide competitive benefits while managing cash flow.

How We Can Help

At Venteur, we understand that managing compliance across multiple states becomes simpler when benefits administration integrates with your compensation strategy. Our employer experience platform is fully compliant and integrates with your payroll provider. With no setup fees or monthly minimums, we deliver cost-effective benefits administration that scales with your business. Our employee experience platform gives employees more control over their health decisions. Whether you're adjusting compensation for new minimum wage rates or evaluating benefits strategy, our ICHRA platform simplifies the administrative burden.